ARC DOCUMENT SOLUTIONS, INC. - Quarter Report: 2011 March (Form 10-Q)

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-32407

AMERICAN REPROGRAPHICS COMPANY

(Exact name of Registrant as specified in its Charter)

Delaware		20-1700361
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1981 N. Broadway, Suite 385
Walnut Creek, California 94596
(925) 949-5100

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

As of May 4, 2011, there were 46,181,302 shares of the issuer’s common stock outstanding.

 

 

AMERICAN REPROGRAPHICS COMPANY

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2011

Table of Contents

PART I—Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)			4
Condensed Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010			4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010			5
Condensed Consolidated Statements of Equity and Comprehensive Loss for the three months ended March 31, 2011 and 2010			6
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010			7
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			40
PART II—Other Information
Item 1. Legal Proceedings			41
Item 1A. Risk Factors			41
Item 6. Exhibits			42
Signatures			43
Exhibit Index			44
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Quarterly Report on Form 10-Q, the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” and variations of such words and similar expressions as they relate to our management or to the Company are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein. We have described in Part II, Item 1A-“Risk Factors” a number of factors that could cause our actual results to differ from our projections or estimates. These factors and other risk factors described in this report are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements.

Except where otherwise indicated, the statements made in this Quarterly Report on Form 10-Q are made as of the date we filed this report with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically disclaim any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and any amendments thereto, as well as our proxy statements.

PART I—FINANCIAL INFORMATION

Item 1.		Condensed Consolidated Financial Statements

AMERICAN REPROGRAPHICS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,				December 31,
		2011				2010
Assets
Current assets:
Cash and cash equivalents		$	22,672			$	26,293
Accounts receivable, net of allowances for accounts receivable of $3,935 and $4,030 at March 31, 2011 and December 31, 2010, respectively			60,791				52,619
Inventories, net			11,824				10,689
Deferred income taxes			13,721				7,157
Prepaid expenses and other current assets			14,322				10,944
Total current assets			123,330				107,702
Property and equipment, net			57,862				59,036
Goodwill			294,759				294,759
Other intangible assets, net			57,941				62,643
Deferred financing costs, net			4,862				4,995
Deferred income taxes			28,816				37,835
Other assets			2,024				2,115
Total assets		$	569,594			$	569,085
Liabilities and Equity
Current liabilities:
Accounts payable		$	22,869			$	23,593
Accrued payroll and payroll-related expenses			9,801				7,980
Accrued expenses			24,121				30,134
Current portion of long-term debt and capital leases			33,356				23,608
Total current liabilities			90,147				85,315
Long-term debt and capital leases			214,485				216,016
Other long-term liabilities			3,175				5,072
Total liabilities			307,807				306,403
Commitments and contingencies (Note 10)
Stockholders’ equity:
American Reprographics Company stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized; zero and zero shares issued and outstanding			—				—
Common stock, $0.001 par value, 150,000,000 shares authorized; 46,193,156 and 46,183,463 shares issued and 45,745,502 and 45,735,809 shares outstanding in 2011 and 2010, respectively			46				46
Additional paid-in capital			97,795				96,251
Retained earnings			169,816				173,459
Accumulated other comprehensive loss			(4,330	)			(5,541	)
			263,327				264,215
Less cost of common stock in treasury, 447,654 shares in 2011 and 2010			7,709				7,709
Total American Reprographics Company stockholders’ equity			255,618				256,506
Noncontrolling interest			6,169				6,176
Total equity			261,787				262,682
Total liabilities and equity		$	569,594			$	569,085

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERICAN REPROGRAPHICS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended
		March 31,
		2011				2010
Reprographics services		$	70,022			$	76,257
Facilities management			24,203				22,403
Equipment and supplies sales			12,279				13,501
Total net sales			106,504				112,161
Cost of sales			73,118				75,310
Gross profit			33,386				36,851
Selling, general and administrative expenses			27,832				27,131
Amortization of intangible assets			4,744				2,636
Income from operations			810				7,084
Other income			(26	)			(43	)
Interest expense, net			8,167				5,888
(Loss) income before income tax (benefit) provision			(7,331	)			1,239
Income tax (benefit) provision			(3,649	)			530
Net (loss) income			(3,682	)			709
Loss attributable to the noncontrolling interest			39				8
Net (loss) income attributable to American Reprographics Company		$	(3,643	)		$	717
Earnings per share attributable to American Reprographics Company shareholders:
Basic		$	(0.08	)		$	0.02
Diluted		$	(0.08	)		$	0.02
Weighted average common shares outstanding:
Basic			45,322,092				45,150,483
Diluted			45,322,092				45,356,871

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERICAN REPROGRAPHICS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE LOSS
(Unaudited)

		American Reprographics Company Shareholders
																		Accumulated
										Additional								Other
		Common Stock								Paid-In				Retained				Comprehensive				Common Stock				Noncontrolling
		Shares				Par Value				Capital				Earnings				Loss				in Treasury				Interest				Total
Balance at December 31, 2009			45,664,999			$	46			$	89,982			$	200,961			$	(7,273	)		$	(7,709	)		$	6,017			$	282,024
Stock-based compensation			—				—				1,461				—				—				—				—				1,461
Issuance of common stock under
Employee Stock Purchase Plan			2,099				—				16				—				—				—				—				16
Stock options exercised			3,000				—				16				—				—				—				—				16
Tax benefit from stock based compensation			—				—				3				—				—				—				—				3
Comprehensive income:
Net income (loss)			—				—				—				717				—				—				(8	)			709
Foreign currency translation adjustments			—				—				—				—				116				—				—				116
Loss on derivative, net of tax effect			—				—				—				—				(313	)			—				—				(313	)
Comprehensive income:																															512
Balance at March 31, 2010			45,670,098			$	46			$	91,478			$	201,678			$	(7,470	)		$	(7,709	)		$	6,009			$	284,032

		American Reprographics Company Shareholders
																		Accumulated
										Additional								Other
		Common Stock								Paid-In				Retained				Comprehensive				Common Stock				Noncontrolling
		Shares				Par Value				Capital				Earnings				Loss				in Treasury				Interest				Total
Balance at December 31, 2010			45,735,809			$	46			$	96,251			$	173,459			$	(5,541	)		$	(7,709	)		$	6,176			$	262,682
Stock-based compensation			1,444				—				1,489				—				—				—				—				1,489
Issuance of common stock under
Employee Stock Purchase Plan			1,249				—				11				—				—				—				—				11
Stock options exercised			7,000				—				41				—				—				—				—				41
Tax benefit from stock based compensation			—				—				3				—				—				—				—				3
Comprehensive loss:
Net loss			—				—				—				(3,643	)			—				—				(39	)			(3,682	)
Foreign currency translation adjustments			—				—				—				—				257				—				32				289
Amortization of derivative, net of tax effect			—				—				—				—				954				—				—				954
Comprehensive loss:																															(2,439	)
Balance at March 31, 2011			45,745,502			$	46			$	97,795			$	169,816			$	(4,330	)		$	(7,709	)		$	6,169			$	261,787

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERICAN REPROGRAPHICS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three Months Ended
		March 31,
		2011				2010
Cash flows from operating activities
Net (loss) income		$	(3,682	)		$	709
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Allowance for accounts receivable			180				261
Depreciation			7,742				9,020
Amortization of intangible assets			4,744				2,636
Amortization of deferred financing costs			216				384
Amortization of bond discount			132				—
Stock-based compensation			1,489				1,461
Excess tax benefit related to stock-based compensation			(8	)			(3	)
Deferred income taxes			2,318				274
Amortization of derivative, net of tax effect			954				—
Other non-cash items, net			(130	)			(191	)
Changes in operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable			(8,268	)			(5,419	)
Inventory			(1,191	)			156
Prepaid expenses and other assets			(3,228	)			(2,515	)
Accounts payable and accrued expenses			3,321				2,695
Net cash provided by operating activities			4,589				9,468
Cash flows from investing activities
Capital expenditures			(4,136	)			(1,217	)
Payment for swap transaction			(9,729	)			—
Other			378				551
Net cash used in investing activities			(13,487	)			(666	)
Cash flows from financing activities
Proceeds from stock option exercises			41				16
Proceeds from issuance of common stock under Employee Stock Purchase Plan			23				0
Excess tax benefit related to stock-based compensation			8				3
Payments on long-term debt agreements and capital leases			(7,540	)			(11,202	)
Net borrowings (repayments) under revolving credit facility			12,800				(814	)
Payment of loan fees			(164	)			—
Net cash provided by (used in) financing activities			5,168				(11,997	)
Effect of foreign currency translation on cash balances			109				1
Net change in cash and cash equivalents			(3,621	)			(3,194	)
Cash and cash equivalents at beginning of period			26,293				29,377
Cash and cash equivalents at end of period		$	22,672			$	26,183
Supplemental disclosure of cash flow information
Noncash investing and financing activities
Noncash transactions include the following:
Capital lease obligations incurred		$	2,461			$	1,930
Net loss on derivative, net of tax effect		$	—			$	(313	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

1. Description of Business and Basis of Presentation

American Reprographics Company (“ARC” or the “Company”) is the leading reprographics company in the United States providing business-to-business document management services primarily to the architectural, engineering and construction (“AEC”) industry. ARC also provides these services to companies in non-AEC industries, such as aerospace, technology, financial services, retail, entertainment, and food and hospitality that require sophisticated document management services. The Company conducts its operations through its wholly-owned operating subsidiary, American Reprographics Company, L.L.C., a California limited liability company, and its subsidiaries.

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conformity with the requirements of the United States Securities and Exchange Commission (“SEC”). As permitted under those rules, certain footnotes or other financial information required by GAAP for complete financial statements have been condensed or omitted. In management’s opinion, the interim Condensed Consolidated Financial Statements presented herein reflect all adjustments of a normal and recurring nature that are necessary to fairly present the interim Condensed Consolidated Financial Statements. All material intercompany accounts and transactions have been eliminated in consolidation. All subsequent events have been evaluated through the date the interim Condensed Consolidated Financial Statements were issued. The operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim Condensed Consolidated Financial Statements and accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis and relies on historical experience and various other factors that it believes to be reasonable under the circumstances to determine such estimates. Actual results could differ from those estimates and such differences may be material to the interim Condensed Consolidated Financial Statements.

These interim Condensed Consolidated Financial Statements and notes should be read in conjunction with the consolidated financial statements and notes included in the Company’s 2010 Annual Report on Form 10-K. The accounting policies used in preparing these interim Condensed Consolidated Financial Statements are the same as those described in the Company’s 2010 Annual Report on Form 10-K, except for the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2009-13, Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues Task Force, (“ASU 2009-13”), FASB ASU No. 2010-28, Intangibles-Goodwill and Other, (“ASU 2010-28”) and FASB ASU No. 2010-29, Business Combinations- Disclosure of Supplementary Pro Forma Information for Business Combinations, (“ASU 2010-29”) which are further described in Note 14, “Recent Accounting Pronouncements.”

Risk and Uncertainties

The Company generates the majority of its revenue from sales of products and services provided to the AEC industry. As a result, the Company’s operating results and financial condition can be significantly affected by economic factors that influence the AEC industry, such as non-residential and residential construction spending, GDP growth, interest rates, unemployment rates, office vacancy rates, and government expenditures. The effects of the recent recession and current economic environment in the United States, have resulted in a significant downturn in the non-residential and residential portions of the AEC industry. The AEC industry generally experiences downturns several months after a downturn in the general economy and that there may be a similar delay in the recovery of the AEC industry following a recovery in the general economy. Similar to the AEC industry, the reprographics industry typically lags a recovery in the broader economy. A prolonged downturn in the AEC industry and the reprographics industry would diminish demand for ARC’s products and services, and would therefore negatively impact revenues and have a material adverse impact on its business, operating results and financial condition.

2. Stock-Based Compensation

The Company adopted the American Reprographics Company 2005 Stock Plan (the “Stock Plan”) in February 2005. The Stock Plan provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock purchase awards, restricted stock awards, and restricted stock units to employees, directors and consultants of the Company. The Stock Plan authorizes the Company to issue up to 5,000,000 shares of common stock. This amount automatically increased annually on the first day of the Company’s fiscal year, from 2006 through and including 2010, by the lesser of (i) 1.0% of the Company’s outstanding shares on the date of the increase; (ii) 300,000 shares; or (iii) such smaller number of shares determined by the Company’s board of directors. As of March 31, 2011, 2,755,425 shares remain available for issuance under the Stock Plan.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

In February 2011, the Company granted options to acquire a total of 9,587 shares of the Company’s common stock to certain key employees with an exercise price equal to the fair market value of the Company’s common stock on the date of grant. The stock options granted to those key employees vest at a rate of 33 1/3% on each of the first three anniversaries of the date of grant and expire 10 years after the date of grant. In March 2011, the Company granted an option to acquire 45,249 shares of the Company’s common stock to the Company’s Chief Operating Officer with an exercise price equal to the fair market value of the Company’s common stock on the date of grant. The stock option granted to the Company’s Chief Operating Officer vests at a rate of 25% on each of the first four anniversaries of the date of grant and expires 10 years after the date of grant. The Company also granted 1,444 shares of restricted stock to its President and Chief Executive Officer at a price per share of $8.66, which was the closing price of the Company’s common stock on the New York Stock Exchange on the date the restricted stock was granted. The shares of restricted stock will vest 25% on each of the first four anniversaries of the date of grant.

Stock options granted under the Stock Plan generally expire no later than ten years from the date of grant. Options generally vest and become fully exercisable over a period of two to five years, except that options granted to non-employee directors may vest over a shorter time period. The exercise price of options must be equal to at least 100% (110% in the case of an incentive stock option granted to a 10% stockholder) of the fair market value of the Company’s common stock on the date of grant. The Company allows for cashless exercises of vested outstanding options.

The impact of stock-based compensation on the interim Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010, before income taxes, was $1.5 million.

As of March 31, 2011, total unrecognized compensation cost related to unvested stock-based payments totaled $3.1 million and is expected to be recognized over a weighted-average period of 2.3 years.

3. Employee Stock Purchase Plan

The Company adopted the American Reprographics Company 2005 Employee Stock Purchase Plan (the “ESPP”) in February 2005. Effective as of April 29, 2009, the ESPP was amended so that eligible employees may purchase up to a calendar year maximum per eligible employee of the lesser of (i) 2,500 shares of common stock, or (ii) a number of shares of common stock having an aggregate fair market value of $25 thousand as determined on the date of purchase.

Under the April 29, 2009 amendment to the ESPP, the purchase price of common stock acquired pursuant to the ESPP in any offering on or after June 30, 2009 was decreased from 95% to 85% of the fair market value of such shares of common stock on the applicable purchase date. The compensation expense in connection with the amended ESPP for the three months ended March 31, 2011 and 2010 was $2 thousand and $3 thousand, respectively. During the three months ended March 31, 2011, the Company issued 1,249 shares of its common stock to employees under the ESPP of $8.80 per share.

4. Goodwill and Other Intangibles Resulting from Business Acquisitions

Goodwill

In connection with acquisitions, the Company applies the provisions of ASC 805, using the acquisition method of accounting. The excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired is recorded as goodwill.

The Company assesses goodwill at least annually for impairment as of September 30 or more frequently if events and circumstances indicate that goodwill might be impaired. Goodwill impairment testing is performed at reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill.

Goodwill impairment testing is a two-step process. Step one involves comparing the fair value of the reporting units to its carrying amount. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is greater than the fair value, the second step must be completed to measure the amount of impairment, if any. Step two involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of goodwill determined in this step is compared to the carrying value of goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment loss is recognized equal to the difference.

The Company determines the fair value of its reporting units using an income approach. Under the income approach, the Company determined fair value based on estimated discounted future cash flows of each reporting unit. The cash flows are discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of a reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, discount rates and future market conditions, among others. The Company considered market information in assessing the reasonableness of the fair value under the income approach outlined above.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Since the Company’s previous goodwill impairment analysis in September 30, 2010, there were no triggering events that required a subsequent interim impairment analysis. However, even if the procedures did not include an annual assessment of goodwill, there were sufficient indicators in the third quarter of 2010 to require a goodwill impairment analysis as of September 30, 2010. The indicators included among other factors, the Company’s 2010 third quarter results and the revision of projected future earnings.

The results of the Company’s analysis in 2010 indicated that 13 of its reporting units, 12 in the United States, one in China, had a goodwill impairment as of September 30, 2010. Accordingly, the Company recorded a pretax, non-cash charge for the three and nine months ended September 30, 2010 to reduce the carrying value of goodwill by $38.3 million.

The Company continues to assess, among other things, the current economic environment, reporting unit and consolidated performance against plan, and the outlook of the Company’s business and industry in general. A downward trend in one or more of these factors, or a significant decrease in its stock price, could cause the Company to reduce the estimated fair value of its reporting units and recognize a corresponding impairment of the goodwill in connection with a future goodwill impairment analysis.

Given the current economic environment and the uncertainties regarding the impact on the Company’s business, there can be no assurance that the estimates and assumptions regarding the duration of the lack of significant new construction activity in the AEC industry, or the period or strength of recovery, made for purposes of the Company’s goodwill impairment testing as of September 30, 2010, will prove to be accurate predictions of the future. If the Company’s assumptions regarding forecasted EBITDA margins of certain reporting units are not achieved, it may be required to record additional goodwill impairment charges in future periods, whether in connection with the Company’s next annual impairment testing in the third quarter of 2011, or prior to that, if any such change constitutes a triggering event outside of the quarter when it regularly performs its annual goodwill impairment test. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

The changes in the carrying amount of goodwill from January 1, 2010 through March 31, 2011 are summarized as follows:

						Accumulated				Net Carrying
		Gross Goodwill				Impairment Loss				Amount
January 1, 2010		$	405,054			$	72,536			$	332,518
Additions			500				—				500
Goodwill impairment			—				38,263				(38,263	)
Translation adjustment			4				—				4
December 31, 2010			405,558				110,799				294,759
Additions			—				—				—
Goodwill impairment			—				—				—
Translation adjustment			—				—				—
March 31, 2011		$	405,558			$	110,799			$	294,759

The additions to goodwill include the excess purchase price over fair value of net assets acquired, purchase price adjustments, and certain earnout payments.

Long-lived Assets

The Company periodically assesses potential impairments of its long-lived assets in accordance with the provisions of ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The Company groups its assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. The Company has determined that the lowest level for which identifiable cash flows are available is the divisional level.

Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if not.

The reporting units of the Company have been negatively impacted by the drop in commercial and residential construction. Before assessing the Company’s goodwill for impairment, the Company evaluated, as described above, the long-lived assets in its reporting units for impairment as of September 30, 2010 given the reduced level of expected sales, profits and cash flows. Based on this assessment, there was no impairment in 2010. The Company concluded that no triggering events have occurred during the first quarter of 2011 that would require a long-lived asset impairment test.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Other intangible assets that have finite lives are amortized over their useful lives. Customer relationships are amortized using the accelerated method, based on customer attrition rates, over their estimated useful lives of 13 (weighted average) years.

During the fourth quarter of 2010, the Company decided to consolidate the various brands that previously represented the Company’s market presence around the country. Beginning in January 2011, each of the Company’s operating segments and their respective locations began to adopt ARC, the Company’s overall brand name. Original brand names will be used in conjunction with the new ARC brand name to reinforce the Company’s continuing presence in the business communities it serves, and ongoing relationships with its customers. Accordingly, the remaining estimated useful lives of the trade name intangible assets have been revised down to 18 months. This change in estimate is accounted for on a prospective basis, resulting in increased amortization expense over the revised useful life of each trade name. The impact of this change in the first quarter of 2011 was an increase in amortization expense of approximately $2.4 million. Trade names are amortized using the straight-line method. The latest the Company expects to fully retire original trade names is April 2012.

Non-competition agreements are amortized over their term on a straight-line basis.

The following table sets forth the Company’s other intangible assets resulting from business acquisitions as of March 31, 2011 and December 31, 2010 which continue to be amortized:

		March 31, 2011												December 31, 2010
		Gross								Net				Gross								Net
		Carrying				Accumulated				Carrying				Carrying				Accumulated				Carrying
		Amount				Amortization				Amount				Amount				Amortization				Amount
Amortizable other intangible assets:
Customer relationships		$	96,433			$	50,449			$	45,984			$	96,359			$	48,301			$	48,058
Trade names and trademarks			20,294				8,359				11,935				20,294				5,736				14,558
Non-competition agreements			100				78				22				100				73				27
		$	116,827			$	58,886			$	57,941			$	116,753			$	54,110			$	62,643

Based on current information, estimated future amortization expense of amortizable intangible assets for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows:

2011		$	13,869
2012			10,748
2013			6,358
2014			5,547
2015			5,033
Thereafter			16,386
		$	57,941

5. Long-Term Debt

Long-term debt consists of the following:

		March 31,				December 31,
		2011				2010
Borrowings from Revolving Credit Facility; 2.3% interest rate at March 31, 2011		$	12,800			$	—
10.5% Senior Notes due 2016, net of bond discount of $4,176 and $4,308 at March 31, 2011 and December 31, 2010, respectively.			195,824				195,692
Various subordinated notes payable; weighted average 6.2% interest rate at March 31, 2011 and December 31, 2010, respectively; principal and interest payable monthly through November 2013			6,153				8,635
Various capital leases; weighted average 8.9% and 8.8% interest rate at March 31, 2011 and December 31, 2010, respectively; principal and interest payable monthly through February 2016			33,064				35,297
			247,841				239,624
Less current portion			(33,356	)			(23,608	)
		$	214,485			$	216,016

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

10.5% Senior Notes due 2016

On December 1, 2010 (the “Closing Date”), the Company completed a private offering of 10.5% senior unsecured notes due 2016 (the “Notes”).

The Notes have an aggregate principal amount of $200 million. The Notes are general unsecured senior obligations of the Company and are subordinate to all existing and future senior secured debts of the Company to the extent of the assets securing such debt. The Company’s obligations under the Notes are jointly and severally guaranteed by all of the Company’s domestic subsidiaries. The issue price was 97.824% with a yield to maturity of 11.0%. Interest on the Notes accrues at a rate of 10.5% per annum and is payable semiannually in arrears on June 15 and December 15 of each year, commencing on June 15, 2011. The Company will make each interest payment to the holders of record of the Notes on the immediately preceding June 1 and December 1.

The Company received gross proceeds of $195.6 million from the Notes offering. In connection with the issuance of the Notes, the Company entered into an indenture, dated as of the Closing Date (the “Indenture”), among the Company, certain subsidiaries of the Company named therein, as guarantors (the “Guarantors”), and Wells Fargo Bank, National Association, as Trustee; and a Registration Rights Agreement, dated as of the Closing Date (the “Registration Rights Agreement”), among the Company, the Guarantors, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the initial purchasers of the Notes (the “Initial Purchasers”). The Notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

Optional Redemption. At any time prior to December 15, 2013, the Company may redeem all or part of the Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest, if any, to the date of redemption. In addition, the Company may redeem some or all of the Notes on or after December 15, 2013, at redemption prices set forth in the Indenture, together with accrued and unpaid interest, if any, to the date of redemption. At any time prior to December 15, 2013, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the Notes, including any permitted additional notes, at a redemption price equal to 110.5% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption.

Repurchase upon Change of Control. Upon the occurrence of a change in control (as defined in the Indenture), each holder of the Notes may require the Company to repurchase all of the then-outstanding Notes in cash at a price equal to 101% of the aggregate principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

Other Covenants. The Indenture contains covenants that limit, among other things, the Company’s and certain of its subsidiaries’ ability to (1) incur additional debt and issue preferred stock, (2) make certain restricted payments, (3) consummate specified asset sales, (4) enter into certain transactions with affiliates, (5) create liens, (6) declare or pay any dividend or make any other distributions, (7) make certain investments, and (8) merge or consolidate with another person.

Events of Default. The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include non-payment, breach of covenants in the Indenture, cross default and acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest on all of the then-outstanding Notes to be due and payable.

2010 Credit Agreement

On the Closing Date, the Company and certain of its subsidiaries also entered into a new $50 million credit agreement (the “2010 Credit Agreement”) and paid off in full amounts outstanding under its prior credit agreement.

The 2010 Credit Agreement provides for a $50 million senior secured revolving line of credit, of which up to $20 million will be available for the issuance of letters of credit. The revolving line of credit will be available on a revolving basis during the period commencing after the Closing Date and ending on December 1, 2015 and is secured by substantially all of the assets of the Company and certain of its subsidiaries. Advances under the revolving line of credit will be subject to customary borrowing conditions, including the accuracy of representations and warranties and the absence of events of default. The Company may borrow, partially or wholly repay its outstanding borrowings and reborrow, subject to the terms and conditions contained in the 2010 Credit Agreement.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

The Company’s obligations under the 2010 Credit Agreement are guaranteed by its domestic subsidiaries and, subject to certain exceptions, are secured by security interests granted in all of the Company’s and the domestic subsidiaries’ personal and real property.

Advances under the 2010 Credit Agreement will bear interest at LIBOR plus the “applicable rate.” The applicable rate will initially be 2.00%. The applicable rate will be determined based upon the consolidated leverage ratio for the Company with a minimum and maximum applicable rate of 1.50% and 2.00%, respectively. During the continuation of certain events of default, all amounts due under the 2010 Credit Agreement will bear interest at 4.0% above the rate otherwise applicable. In addition, the Company will be required to pay an unused commitment fee on the average daily unused amount of the line of credit at the applicable rate, calculated and payable quarterly in arrears, as follows: if the consolidated leverage ratio is (i) greater than 3.00x, the unused commitment fee is 0.20%, (ii) less than 2.99x but greater than 2.00x, 0.15%, and (iii) less than 2.00x, 0.10%.

The 2010 Credit Agreement contains the following financial covenants:

•

Maximum consolidated leverage ratio as follows:

	•		4.35:1.00 for quarters ending December 31, 2010 through September 30, 2011
	•		4.25:1.00 for quarters ending December 31, 2011 through September 30, 2012
	•		4.15:1.00 for quarters ending December 31, 2012 through September 30, 2013
	•		4.00:1.00 for quarters ending December 31, 2013 through maturity;

	•		Maximum consolidated senior secured debt leverage ratio not greater than 1.50:1.00, determined on the last day of each fiscal quarter through maturity;
	•		Minimum consolidated interest coverage ratio as follows:

	•		1.70:1.00 for quarters ending December 31, 2010 through September 30, 2011
	•		1.75:1.00 for quarters ending December 31, 2011 through maturity;

The 2010 Credit Agreement also contains covenants which, subject to certain exceptions as set forth in the 2010 Credit Agreement, restrict the Company’s ability to incur additional debt, grant liens or guaranty other indebtedness, pay dividends, redeem stock, pay or redeem subordinated indebtedness, make investments or capital expenditures, dispose or acquire assets, dispose of equity interests in subsidiaries, enter into any merger, sale of assets, consolidation or liquidation transaction, or engage in transactions with stockholders and affiliates. Covenants in the 2010 Credit Agreement also require that the Company provide periodic financial reports to the lender, observe certain practices and procedures with respect to the collateral pledged as security, comply with applicable laws and maintain and preserve the Company and its subsidiaries’ properties and maintain insurance.

As of March 31, 2011 the Company was in compliance with the financial incurrence-based covenants under the Notes and financial maintenance-based covenants under the 2010 Credit Agreement. The Company’s trailing twelve months key financial covenant ratios under the 2010 Credit Agreement as of March 31, 2011 were 1.89:1.00 for minimum interest coverage, 3.63:1.00 for maximum total leverage and 0.66:1.00 for maximum senior secured leverage.

The Company expects to be in compliance with the financial covenants in the 2010 Credit Agreement through the term of the agreement. However, it is possible that a default under certain financial covenants may occur in the future, should the minimum required profitability levels not be achieved. If the Company defaults on the covenants under the 2010 Credit Agreement and is unable to obtain waivers from its lenders, the lenders will be able to exercise their rights and remedies under the 2010 Credit Agreement, including a call provision on outstanding debt, which would have a material adverse effect on the Company’s business and financial condition.

As of March 31, 2011, standby letters of credit aggregated to $3.9 million. The standby letters of credit under the 2010 Credit Agreement reduced the Company’s borrowing availability under its 2010 Credit Agreement to $33.3 million.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

2007 Credit Agreement

On December 6, 2007, the Company entered into a credit and guaranty agreement (the “2007 Credit Agreement”). The 2007 Credit Agreement provided for senior secured credit facilities in a maximum aggregate amount of $350 million, consisting of a $275 million term loan facility and a $75 million revolving credit facility. The Company used proceeds from the 2007 Credit Agreement in the amount of $289.4 million to extinguish in full all principal and interest payable under the Company’s former credit facility.

On October 5, 2009, the Company amended the 2007 Credit Agreement (the “Amended 2007 Credit Agreement”). In exchange for the terms set forth in the Amended 2007 Credit Agreement, the Company agreed to pay to each consenting lender an amendment fee equal to 50 basis points of the amount of each consenting lender’s revolving commitment and outstanding term loans as of the effective date of the Amended 2007 Credit Agreement (as determined on a pro forma basis after giving effect to the $35.0 million prepayment and reduction of total revolving commitments to $49.5 million) which amounted to $1.3 million. In addition, the Company agreed to pay to each consenting lender that has a Class B term loan commitment under the Amended 2007 Credit Agreement and amortization deferral fee of 100 basis points of such consenting lender’s Class B term loan commitment which amounted to $0.4 million. The Company also paid customary arrangement and service fees of $2.0 million in connection with the Amended 2007 Credit Agreement. Total fees amounted to $3.7 million of which $2.1 million was capitalized into Deferred Financing Fees and $1.6 million was expensed under interest expense for 2009.

On December 1, 2010, the Company paid off, in full, amounts outstanding under the Amended 2007 Credit Agreement when the private placement of the 10.5% senior unsecured notes was completed.

Interest Rate Swap Transaction

On December 19, 2007, the Company entered into an interest rate swap transaction (the “Swap Transaction”) in order to hedge the floating interest rate risk on the Company’s long term variable rate debt. Under the terms of the Swap Transaction, the Company was required to make quarterly fixed rate payments to the counterparty calculated based on an initial notional amount of $271.6 million at a fixed rate of 4.1375%, while the counterparty was obligated to make quarterly floating rate payments to the Company based on the three month LIBO rate. The notional amount of the Swap Transaction was scheduled to decline over the term of the then existing term loan facility consistent with the scheduled principal payments. The Swap Transaction had an effective date of March 31, 2008 and a termination date of December 6, 2012.

On October 2, 2009, the Company amended its Swap Transaction (“Amended Swap Transaction”). The Company entered into the Amended Swap Transaction in order to reduce the notional amount under the initial Swap Transaction from $271.6 million to $210.8 million to hedge the Company’s then-existing variable interest rate debt under the Amended 2007 Credit Agreement.

On December 1, 2010, the Company issued the Notes. As a result, the Amended Swap Transaction no longer qualified as a cash flow hedge and was de-designated.

As of December 31, 2010, the Amended Swap Transaction had a negative fair value of $9.7 million of which all was recorded in accrued expenses. On January 3, 2011, the Amended Swap Transaction was terminated and settled. For further information, see Note 7 “Derivatives and Hedging Transactions”.

6. CONDENSED FINANCIAL STATEMENTS

The Notes are fully and unconditionally guaranteed, on a joint and several basis, by all of the Company’s domestic subsidiaries (the “Guarantor Subsidiaries”). The Company’s foreign subsidiaries do not guarantee the Notes (the “Non-Guarantor Subsidiaries”). Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by the Company. There are no significant restrictions on the ability of the Company to obtain funds from any of the guarantor subsidiaries by dividends or loan. The Company currently intends to register the Notes with the SEC in 2011. Therefore, in lieu of providing separate audited financial statements for the Guarantor Subsidiaries, condensed consolidating financial information is presented below.

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Consolidating Condensed Balance Sheet
March 31, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	—			$	10,620			$	12,052			$	—			$	22,672
Restricted cash																			—
Accounts receivable, net			—				56,027				4,764				—				60,791
Intercompany operations			295				3,564				(3,859	)			—				—
Inventories, net			—				8,259				3,565				—				11,824
Deferred income taxes			—				13,721				—				—				13,721
Prepaid expenses and other current assets			52				12,070				2,200				—				14,322
Total current assets			347				104,261				18,722				—				123,330
Property and equipment, net			—				50,754				7,108				—				57,862
Goodwill			—				294,759				—				—				294,759
Investment in subsidiaries			262,692				15,680				—				(278,372	)			—
Other intangible assets, net			—				55,907				2,034				—				57,941
Deferred financing costs, net			4,862				—				—				—				4,862
Deferred income taxes			2,853				23,373				2,590				—				28,816
Other assets			—				1,946				78				—				2,024
Total assets		$	270,754			$	546,680			$	30,532			$	(278,372	)		$	569,594
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	20,840			$	2,029			$	—			$	22,869
Accrued payroll and payroll-related expenses			—				9,398				403				—				9,801
Accrued expenses			7,061				15,121				1,939				—				24,121
Intercompany loans			(200,549	)			200,445				104				—				—
Current portion of long-term debt and capital leases			12,800				19,545				1,011				—				33,356
Total current liabilities			(180,688	)			265,349				5,486				—				90,147
Long-term debt and capital leases			195,824				17,049				1,612				—				214,485
Other long-term liabilities			—				1,590				1,585				—				3,175
Total liabilities			15,136				283,988				8,683				—				307,807
Commitments and contingencies
Total equity			255,618				262,692				21,849				(278,372	)			261,787
Total liabilities and equity		$	270,754			$	546,680			$	30,532			$	(278,372	)		$	569,594

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Consolidating Condensed Balance Sheet
December 31, 2010

		American
		Reprographics				Guarantor				Non-Guarantor
		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	—			$	12,587			$	13,706			$	—			$	26,293
Accounts receivable, net			—				48,283				4,336				—				52,619
Intercompany operations			295				2,717				(3,012	)			—				—
Inventories, net			—				8,090				2,599				—				10,689
Deferred income taxes			—				7,157				—				—				7,157
Prepaid expenses and other current assets			72				8,741				2,131				—				10,944
Total current assets			367				87,575				19,760				—				107,702
Property and equipment, net			—				52,376				6,660				—				59,036
Goodwill			—				294,759				—				—				294,759
Investment in subsidiaries			257,838				16,065				—				(273,903	)			—
Other intangible assets, net			—				60,585				2,058				—				62,643
Deferred financing costs, net			4,995				—				—				—				4,995
Deferred income taxes			708				34,453				2,674				—				37,835
Other assets			—				1,978				137				—				2,115
Total assets		$	263,908			$	547,791			$	31,289			$	(273,903	)		$	569,085
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	21,137			$	2,456			$	—			$	23,593
Accrued payroll and payroll-related expenses			—				7,643				337				—				7,980
Accrued expenses			2,210				25,563				2,361				—				30,134
Intercompany loans			(190,500	)			190,241				259				—				—
Current portion of long-term debt and capital leases			—				22,787				821				—				23,608
Total current liabilities			(188,290	)			267,371				6,234				—				85,315
Long-term debt and capital leases			195,692				19,201				1,123				—				216,016
Other long-term liabilities			—				3,381				1,691				—				5,072
Total liabilities			7,402				289,953				9,048				—				306,403
Commitments and contingencies
Total equity			256,506				257,838				22,241				(273,903	)			262,682
Total liabilities and equity		$	263,908			$	547,791			$	31,289			$	(273,903	)		$	569,085

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Consolidating Condensed Statement of Operations
March 31, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	97,990			$	8,514							$	106,504
Cost of sales			—				66,615				6,503								73,118
Gross profit			—				31,375				2,011				—				33,386
Selling, general and administrative expenses			—				25,827				2,005				—				27,832
Amortization of intangible assets			—				4,678				66				—				4,744
Income (loss) from operations			—				870				(60	)			—				810
Other income			—				(26	)			—				—				(26	)
Interest expense (income), net			5,740				2,442				(15	)			—				8,167
Loss before equity in earnings of subsidiaries and income tax benefit			(5,740	)			(1,546	)			(45	)			—				(7,331	)
Equity in earnings of subsidiaries			50				(2	)			—				(48	)			—
Income tax benefit			(2,147	)			(1,494	)			(8	)			—				(3,649	)
Net (loss) income			(3,643	)			(50	)			(37	)			48				(3,682	)
Loss attributable to noncontrolling interest			—								39								39
Net (loss) income attributable to American
Reprographics Company		$	(3,643	)		$	(50	)		$	2			$	48			$	(3,643	)

		American
		Reprographics				Guarantor				Non-Guarantor
		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	104,088			$	8,073							$	112,161
Cost of sales			—				69,023				6,287								75,310
Gross profit			—				35,065				1,786				—				36,851
Selling, general and administrative expenses			—				25,427				1,704				—				27,131
Amortization of intangible assets			—				2,564				72				—				2,636
Income from operations			—				7,074				10				—				7,084
Other (income) expense, net			—				(43	)			—				—				(43	)
Interest expense, net			—				5,882				6				—				5,888
Income (loss) before equity in earnings of subsidiaries and income tax benefit			—				1,235				4				—				1,239
Equity in earnings of subsidiaries			(717	)			—				—				717				—
Income tax (benefit) provision			—				518				12				—				530
Net income (loss)			717				717				(8	)			(717	)			709
Loss attributable to noncontrolling interest			—								8								8
Net income (loss) attributable to American Reprographics
Company		$	717			$	717			$	—			$	(717	)		$	717

AMERICAN REPROGRAPHICS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)

Consolidating Condensed Statement of Cash Flows
March 31, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Cash flows from operating activities
Net cash (used in) provided by operating activities		$	(2,587	)		$	7,220			$	(44	)		$	—			$	4,589
Cash flows from investing activities
Capital expenditures			—				(3,851	)			(285	)			—				(4,136	)
Payment for swap transaction							(9,729	)											(9,729	)
Other			—				319				59				—				378
Net cash used in investing activities			—				(13,261	)			(226	)			—				(13,487	)
Cash flows from financing activities
Proceeds from stock option exercises			—				41				—				—				41
Proceeds from issuance of common stock under Employee Stock Purchase Plan			—				23				—				—				23
Excess tax benefit related to stock-based compensation			—				8				—				—				8
Payments on long-term debt agreements and capital leases			—				(7,049	)			(491	)			—				(7,540	)
Net borrowings under revolving credit facility			12,800												—				12,800
Payment of deferred financing fees			(164	)							—				—				(164	)
Advances to/from subsidiaries			(10,049	)			11,051				(1,002	)							—
Net cash provided by (used in) financing activities			2,587				4,074				(1,493	)			—				5,168
Effect of foreign currency translation on cash balances			—				—				109				—				109
Net change in cash and cash equivalents			—				(1,967	)			(1,654	)			—				(3,621	)
Cash and cash equivalents at beginning of period			—				12,587				13,706				—				26,293
Cash and cash equivalents at end of period		$	—			$	10,620			$	12,052			$	—			$	22,672